NEW YORK (TheStreet) --
Just how serious will the austerity programs be for EUR countries and others? The IMF has started a series called the Fiscal Monitor. The latest issue,
Financial NeedTable 1 below provides data on the financial needs of a number of developed nations over the next two years. The table is notable because it includes maturing debt as well as new government debt. When a country gets in trouble, a government must find buyers for its maturing debt as well as its current government deficit. In fact, the Greek debt crisis came to a head over its failure to find new borrowers for its maturing debt. Even though the average maturity of the Japanese debt is greater than that of the U.S., it has a very large fraction of it coming due over the next two years. However, Japan sells most of its debt locally, and with its large international reserves, its financial position is not viewed as risky. The UK is perhaps situated better than any other country included in the table because its average debt maturity is 14 years compared to the U.S. at about five years.
As a brief aside, consider what the central banks of the UK and U.S. have done, over the last two years. In 2009, the Fiscal Monitor estimated that Bank of England purchased 86.5% of the government's net new issuance of debt. In the U.S., the Fed purchased 20.9%. Countries using the euro don't have their own central bank to buy up their debt.